Every year, countless lower-income working families give up valuable tax credits because they don't apply for them.
And every year, there are fewer reasons why this should happen.
There are increasing numbers of ways to get free assistance with tax preparation, and that assistance can help families make sure that they aren't missing out on benefits like the earned income tax credit.
The earned income tax credit is a valuable benefit, worth an average of $2,187 to nearly half a million South Carolina residents in 2009. That's more than a billion dollars that flowed into the state's economy at the height of the recession. But by some estimates, residents of the tri-county area left $17 million unclaimed.
Often, the credit goes unclaimed because people don't know about it, or they don't file a tax return because they earned too little to owe income tax. The earned income tax credit is essentially a refund of federal payroll taxes, but you have to file a tax return to claim it.
A married couple with two children could earn up to $45,373 and still benefit from the tax credit.
Regardless of the earned income tax credit, the tax code is complex and ever-changing, with credits and deductions that can appear one year and disappear the next, so it's helpful to use either a trained tax preparer or at least a tax preparation software program.
Here are some of the options for free tax prep assistance:
--Most U.S. taxpayers, the seven out of 10 with adjusted gross incomes of $58,000 or less, can use brand-name tax preparation software at no charge to prepare their federal tax returns online through a partnership with the IRS. And, all taxpayers with access to a computer can use the IRS's online tax forms, which can be filled out and filed online and will check your math. Go to www.freefile.irs.gov for information.
--In Berkeley, Charleston and Dorchester counties, Trident United Way offers free in-person tax preparation and financial counseling to people with low to moderate incomes, which generally means household income of up to $49,000, through the Volunteers Income Tax Assistance Program. To find a VITA site near you, call Trident Urban League at 965-4037 or visit www.tuw.org/taxprep.asp (there's link to a list of tax preparation sites at the bottom of the website) or call the IRS VITA hotline at 800-906-9887.
--AARP Tax-Aide also offers free assistance for federal and state returns to the elderly and to people with low to moderate incomes, as part of the federal Tax Counseling for the Elderly initiative. In Charleston County, the library has a list of times and dates for tax assistance. Visit www.ccpl.org or call 805-6930. For other counties, visit www.aarp.org.
If you plan to use one of these services, call or visit the organization's website first so that you'll know what documents, identification and other things you may need to bring.
If you plan to use the IRS Free File service, make sure you print out a copy of your tax return before you file it online.
On a lighter note, here's a South Carolina tax credit you probably won't qualify for:
If you are a meat packer, butcher or processing plant licensed by South Carolina or the federal government and you have a contract with a nonprofit group to process deer as food for the needy, South Carolina will give you a $50 tax credit against your state taxes for each deer processed, so long as none of the deer is used for commercial purposes. Really. It's called the Venison for Charity Credit and it made the "America's silliest taxes" list in a Forbes.com blog this week.